I'm skeptical at how this will affect the quality of upcoming VR games since less time to render generally means a scene that is less photorealistic. Then again, maybe the immersion (presence) factor will overcome the graphical drop in quality?
To me, that's one of the most fascinating things about games. Breakout hits make the right trade offs to push the platform further than you thought it could go. This stands true since games were put on computers.
If you have a simple enough subject to start with, and bake enough lighting and shadow mapping into the textures, you can make a photorealistic scene on even previous-generation console hardware. Once you start adding more objects, and allowing more things to move, you start needing to calculate more in real time, and you need more processing and rendering power.
A room with a table and a teapot could probably be made photorealistic on a PS3, even at 90 FPS. A densely populated street with moving cars and pedestrians, however, would have to be fairly visually abstracted to hit that target even on a PS4.
Some games will do 120fps though, not sure who will pull that off voluntarily though!!!
It'll be interesting to see what quality the PS4 can support on this, but we already know good games are possible with simpler graphics.
For now, by definition VR graphics (which mandate high FPS, high resolution, rendering for each eye) are always going to be behind state of the art graphics for non-VR games.
Personally, I find the idea of non-photorealistic VR environments much more interesting as well.
I think films are a great example of demonstrating that realism =/= immersion. Movies like Lego Movie, The Incredibles, etc can be just as immersive as live action. The secret sauce isn't realism, it's choosing the right style for the content, gameplay and theme you are going for.